I need some guidance.
Corporation XYZ was incorporated on 25 Jan 2019. A, B and C owned 33.3% each of corporation XYZ. They sold all of their shares to D and E (50% each) on Jan 28, 2020.
I am preparing T2 return for Corporation XYZ. I understand that it is a deemed tax year end on Jan 27 2020 due to change of shareholders (acquisition of Control by D and E). On 28th Jan 2020, the new owners also filed with Ministry of Government Services for change of registered office and directors.
While filing the return as of 27 Jan 2020 (in Oct 2020), should I mention new registered office (changed after deemed tax year end and before my filing date) and who would sign T183? Old directors or new ones?
New Officers and Directors are responsible for filing and other activities past and present of the corporation, both in corporate law and tax law (absent a few exceptions). New owners should have obtained indemnities from the old owners for any errors or omissions, although this often does not happen where the transfer was not professionally managed.
New owners file, sign T183 and take over all corporate records – that is what “ownership” means and entails in a corporate environment. Everything. Change of address should be done online and confirmed on T2. Change of Directors and Shareholders will not occur unless you file same - separately - to CRA and notify them. They do NOT respond to changes filed at corporate registries anywhere, other than the corp being struck.
Make sure you do, in fact, have an “acquisition of control”. A change in control does not equal an acquisition of control. In this case, control has not been acquired by a person, but by a group of persons. Examine the definition of “group of persons” to ensure there has been an acquisition. Control, for this section of the ITA is different than for the association rules, for example.